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Income Tax Appellate Tribunal, DELHI BENCH ‘B’ : NEW DELHI
Before: SHRI R.S. SYAL & SHRI KULDIP SINGH
(PAN : AAATC0399L) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Gaurav Jain, Advocate REVENUE BY : Ms. Rachna Singh, CIT DR Date of Hearing : 16.11.2016 Date of Order : 21.11.2016 O R D E R
PER KULDIP SINGH, JUDICIAL MEMBER :
The Appellant, Caritas India (hereinafter referred to as ‘the assessee’) by filing the present appeal sought to set aside the impugned order dated 26.10.2010 passed by the Commissioner of Income-tax (Appeals)-XII, New Delhi qua the assessment year 2004-05 on the grounds inter alia that :- “1. That the Commissioner of Income Tax (Appeals) erred on facts and in law in upholding the addition of Rs.60,78,39,283 in respect of donations received for providing relief to the victims of earthquake in Gujarat deemed as income of the appellant under section 12(3) of the Income-tax Act, 1961 ('the Act'). 1.1 That the Commissioner of Income Tax (Appeals) erred on facts and in law in not appreciating that the impugned amount of donation, aggregating to Rs.49,80,51,533, was not liable to be deemed as income under section 12(3) of the Act, since the appellant has filed a petition before the Central Board of Direct Taxes with a request to condone the delay in filing income and expenditure account along with Form 10AA before the prescribed authority viz. Director of Income Tax (Exemptions).
2. Without prejudice, that the Commissioner of Income Tax (Appeals) erred on facts and in law in not reducing the addition made in the assessment order by an amount of Rs.10,97,87,750, since the amount of donation received from abroad during the relevant year was incorrectly taken at Rs.55,20,79,607 instead of actual amount of Rs.44,22,91,857.
3. Further without prejudice, that the CIT (Appeals) erred on facts and in law in not deleting the addition of Rs.44,22,91,857 on account of donation received from abroad. since the said donations were not given by "assessee" referred to in 4. section 80G(2)(d) read with section 2(7) and were, thus, not covered by the provisions of section 12(3) of the Act.
5. That the Commissioner of Income Tax (Appeals) erred on facts and in law in not deleting the interest charged under section 234B, 234D and reversing the action of the assessing officer in withdrawing interest under section 244A of the Act.
Briefly stated the facts of this case are : return of income filed by the assessee qua assessment year 2004-05 was subjected to scrutiny. The assessee is a registered society carrying out its activities in accordance with the aims and objects enshrined in the memorandum of association. Assessee society during the year under assessment received foreign donation of Rs.55,20,79,607/- and local donation of Rs.5,57,59,676/- for relief to the victims of the Gujarat Earthquake. Assessee claimed that so far as donation of Rs.55,20,79,607/- received from foreign donors is concerned, the foreign donors are not covered under section 80G of the Income-tax Act, 1961 (for short ‘the Act’) they being not assessee.
However, this contention is not accepted by the AO in the light of the provisions contained u/s 5 of the Act as the assessee has failed to lead any evidence that donors are not an assessee. AO also not accepted the claim of the assessee, “that the donation of Rs.5,57,59,676/- from local donors being not taxable”, on the ground that the amount has been utilized for relief of Gujarat Earthquake victims, because the assessee has failed to furnish the order of the prescribed authority in the prescribed manner and by invoking the provisions contained u/s 12 (3) of the Act for deeming the donation of Rs.5,57,59,676/- as taxable income. AO assessed the deemed income under section 12 (3) at Rs.60,78,39,283/-.
Assessee carried the matter before the ld. CIT (A) by way of filing the appeal who has dismissed the same. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal.
We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
At the very outset, the ld. AR for the assessee has not pressed the issue regarding donation of Rs.55,20,79,607/- received from foreign donors having been made taxable as per section 5 of the Act.
Undisputedly, the assessee has received donations during Gujarat Earthquake which was to be spent on or before 31.03.2004 and accounts were to be furnished before the DGIT (Exemptions) on or before 30.06.2004 which has not been furnished. It is also not in dispute that assessee moved to the competent authority by filing a petition for condonation of delay, which was rejected and then assessee approached the Hon’ble High Court which has opined that the competent authority has power to condone the delay and has set aside the order to Central Board of Direct Taxes (CBDT).
CBDT by exercising powers u/s 119(2)(b) of the Act authorized the Commissioner of Income-tax (Exemptions), New Delhi to admit the Form No.10AA of the Act in case of assessee for AY 2004-05 as form filed by the due date u/s 80G(5C)(v) read with section 80G(2)(d) of the Act to deal with the returns for that assessment year on merits and in accordance with the provisions of law.
In the backdrop of the aforesaid facts and circumstances of the case, the sole question arises for determination in this case is:-
“as to whether the assessee has got the right to furnish the accounts qua local donations received by the assessee company for assessment qua AY 2004-05?” 8. The ld. DR opposed present appeal on the sole ground that since the figures of foreign donations and local donations claimed by the assessee society are not tallying with the figures of amount mentioned by the AO in the assessment order, the grounds of appeal need to be amended. However, we are of the considered view that since the factum of donations received by the assessee for Gujarat Earthquake victims is not in dispute, the clerical error crept in the grounds of appeal or in the order of the AO, as the case may be, may be looked into by the AO at any point of time.
9. In the light of the aforesaid facts and circumstances and the fact that the relief is declined to the assessee on the sole ground that the assessee has failed to furnish accounts to the prescribed authority in the prescribed manner and consequently considered the donation of Rs.5,57,59,676/- as deemed income u/s 12 (3) of the Act, the AO is required to decide afresh after taking into account the account furnished and approval granted by the competent authority since the assessee has been granted permission by the CBDT, the competent authority, to admit Form No.10AA in case of the assessee for AY 2004-05. Consequently, present appeal is allowed and case is restored to the AO to decide afresh and he is also to verify the actual figure after providing an opportunity of being heard to the assessee. 9. Resultantly, the present appeal is allowed for statistical purposes. Order pronounced in open court on this 21st day of November, 2016.